I find C to be one of the few BUY's in this market.
Essentially C has recapitalized and yet its stock has not recovered in proportion. It is hard to find value in the market today for an investor wanting to invest.
I wouldnt hold my breath waiting for the government to break up the big banks but if it happens... higher return.
Just in the here an now C appears incredibly cheap by many different measures.
Why Reinhart And Rogoff Aren't The Real Villains: Scoring Last Week's Internet Debate [View article]
As just a mere citizen and investor a little common sense is in order.
- recognize that spending to help ensure growth exceeds inflation for a few years helps to defuse the crisis
- we probably have a crisis either way ahead of us. - Krugmans theory that money should be spent wildly without any limit is lunacy - Anyone thinking austerity is the total solution is isnt much of a student of history. PS If you read RRs book you will find it hard to come away with anything of value.
P&G Delivers Third Quarter Core EPS of $0.99, Organic Sales Up 3% [View article]
People shouldnt be to surprised by PG results. I just wanted to recap how I look at PG.
They have a terrible CEO who has led a decline in the company for years. Last year Hedge Fund managers bought in and threatened the CEO andeven breaking up the company. A couple of marginally acceptable quarters with lots of promises was the result.
As a long term shareholder I can still calculate that Cash Flow is down 18% over the past 2 years.
If you read the company statement it is easy to see why such a great company is declining and will continue to decline under Bob MacDonald.
- We held constant or improved market share in 50% of or sales.
Translation: We are in decline and cant think of anything else to do but hey we are glass half full people. Arent we clever at how we disguise the fact that over 50% of our business is declining.
- We believe our core earnings guidance is resonable not conservative. Were committed to deliver...
Translation: I want you to know that 1% if everything goes right and the weather is perfect and costs dont rise etc is evidence of how we are charging forward boldly where others are more timid.
Finally one of my all time favorite quotes!
"In Western Europe the percentage of business is holding or growing share is up to 40% from lows of around 25% earlier this fiscal year."
AT&T: A Cash Machine That's Still Attractively Priced [View article]
As a long term investor in T I would be concerned about buying at the current price. Some reasons
T invests huge amounts to build up its network and that doesnt appear to be ending anytime soon. Adding on to that thought, all that investment yields little revenue growth.
Profitability has decreased over the past few years while debt increases.
Cash flow and especially FCF of 7 billion isnt all that much based on the capital level of the company.
The dividend is currently 141% of earnings meaning more dividends are being paid out than earnings.
I am still invested in T and it isnt going to go bust. At the same time I would hate for investors to blindly buy T thinking the dividend has complete safety or that the share price couldnt drop to $30 or below.
IBM Lays An Egg On Failure To Convert Deals And Growth Market Weakness [View article]
Having held IBM and added to it for over a decade I think I understand the longer range picture.
In my mind the events of the last year are big red flags and indicate that it is time to trim an IBM position. A couple of factors
- Blaming a 5% revenue decline on missed closing sales is laughable. Especially for a large diverse corporation like IBM.
- A new CEO that delivers multiple clunkers is a strong indicator of what you can look forward to in future quarters.
I wouldnt sell all IBM but IBM has been a great investment for a decade. It is clearly a different era and a leader that allows 5% of revenue to disappear, doesnt show up for earnings calls and allows excuses such as sales timing isnt much of a CEO.
I take a different view than the author. Last year when IBM reported disappointing earnings under the new CEO I was willing concede that a quarter isnt the total picture.
Now I think the answer is clear that IBM is no longer the company it has been for the past many years which I call the Gerstner/Palmisano era. Long term investors will remember IBM was poorly run before Gerstner took over and sold the PC business.
What bothered me last year was that the Board of Directors had a policy to get a new CEO when a CEO turns 60 or some such irrelevant policy. So an excellent performing CEO was pushed out! One I might add that performed throughout the Great Recession without fail. Excellent CEOs are hard to find and should not be taken for granted!
I blame the Board of Directors not only pushing out Palmisano but for handing the Chairman of the Board role to the new unproven CEO as well.
What happened on Friday wasnt just a miss. I find it quite different when a company loses 5% of its revenue. The excuses given by management of currency translation, big orders just missing the deadline and the economy are just excuses. In the call an analyst asked if they were going to raise next quarter estimates since they had all that revenue booked just after the deadline and they said No.
I dont think IBM can be counted on to perform anymore. Instead of a Gerstner/Palmisano leadership IBM looks to have transitioned to a HPQ style leadership.
PS In another great move the new CEO was afraid to show up to explain the quarter.
International Business Machines' Management Discusses Q1 2013 Results - Earnings Call Transcript [View article]
Very disappointed in IBM results.
They need to get rid of their CEO. She isnt cut out to deliver performance. The tech industry is not kind to those who fall behind.
The huge decline in revenue is inexcusable. They can save the excuses for someone who wants to hear them. A 4% decline in revenue is beyond a small miss in a tough environment.
GE: Is It Time To Hold On Or Buy More? [View article]
Good article!
GE has great 5 year potential due to the businesses and cash as outlined in the article.
The cash listed in the article seems higher than sources I reference but by all accounts GE has lots of cash and has to figure out what to do with all of it.
My belief is that an investment in GE now would have a return of 13.5% in one year. I come to that with an expected 1 year price of $26 and an increased dividend.
That 13.5% return is a conservative return expectation. One could argue persuasively that GE deserves a forward PE greater than 12.3
Time To Fill Up On Coca-Cola? Highlights And Earnings Expectations [View article]
Excellent article!
KO is an excellent holding for a retirement portfolio. My assessment is that it is now fairly valued by historical standards.
The days of finding KO at a 15 PE and a 3%+ dividend are hard to find historically. Now KO is trading at 20 PE and 2.5%+ dividend. I have seen it trade at an 88 PE and 1%+ dividend.
The great management and high cash flow should keep KO doing well for years to come. That said comparing return potential to times when KO products spread around the country and then around the world are probably misguided.
General Electric And Caterpillar Shares Could Be Indicating That A Market Correction Is Coming [View article]
I tend to disagree on GE.
My suspicion is that GE will outperform this quarter. With huge cash flow to valuation they will buy back shares if needed to beat the earnings target.
GE is actually undervalued and with a 3.3% dividend yield it offers great investor potential.
What Happens When Liquidity Disappears? [View article]
It had all the earmarks of the person who sold out of the market and rants endlessly on about why the market must fall.
The market probably should fall but it may not. That is why investors invest!
My only question is whether the author sold out of stocks in 2012 or in Jan? Feb? or Mar?
Earnings Beat Rate By Sector [View article]
Is Citigroup Unsustainably Big? [View article]
Essentially C has recapitalized and yet its stock has not recovered in proportion. It is hard to find value in the market today for an investor wanting to invest.
I wouldnt hold my breath waiting for the government to break up the big banks but if it happens... higher return.
Just in the here an now C appears incredibly cheap by many different measures.
Why Reinhart And Rogoff Aren't The Real Villains: Scoring Last Week's Internet Debate [View article]
- recognize that spending to help ensure growth exceeds inflation for a few years helps to defuse the crisis
- we probably have a crisis either way ahead of us.
- Krugmans theory that money should be spent wildly without any limit is lunacy
- Anyone thinking austerity is the total solution is isnt much of a student of history.
PS If you read RRs book you will find it hard to come away with anything of value.
P&G Delivers Third Quarter Core EPS of $0.99, Organic Sales Up 3% [View article]
They have a terrible CEO who has led a decline in the company for years. Last year Hedge Fund managers bought in and threatened the CEO andeven breaking up the company. A couple of marginally acceptable quarters with lots of promises was the result.
As a long term shareholder I can still calculate that Cash Flow is down 18% over the past 2 years.
If you read the company statement it is easy to see why such a great company is declining and will continue to decline under Bob MacDonald.
- We held constant or improved market share in 50% of or sales.
Translation: We are in decline and cant think of anything else to do but hey we are glass half full people. Arent we clever at how we disguise the fact that over 50% of our business is declining.
- We believe our core earnings guidance is resonable not conservative. Were committed to deliver...
Translation: I want you to know that 1% if everything goes right and the weather is perfect and costs dont rise etc is evidence of how we are charging forward boldly where others are more timid.
Finally one of my all time favorite quotes!
"In Western Europe the percentage of business is holding or growing share is up to 40% from lows of around 25% earlier this fiscal year."
Isnt that special!
AT&T: A Cash Machine That's Still Attractively Priced [View article]
T invests huge amounts to build up its network and that doesnt appear to be ending anytime soon. Adding on to that thought, all that investment yields little revenue growth.
Profitability has decreased over the past few years while debt increases.
Cash flow and especially FCF of 7 billion isnt all that much based on the capital level of the company.
The dividend is currently 141% of earnings meaning more dividends are being paid out than earnings.
I am still invested in T and it isnt going to go bust. At the same time I would hate for investors to blindly buy T thinking the dividend has complete safety or that the share price couldnt drop to $30 or below.
IBM Lays An Egg On Failure To Convert Deals And Growth Market Weakness [View article]
In my mind the events of the last year are big red flags and indicate that it is time to trim an IBM position. A couple of factors
- Blaming a 5% revenue decline on missed closing sales is laughable. Especially for a large diverse corporation like IBM.
- A new CEO that delivers multiple clunkers is a strong indicator of what you can look forward to in future quarters.
I wouldnt sell all IBM but IBM has been a great investment for a decade. It is clearly a different era and a leader that allows 5% of revenue to disappear, doesnt show up for earnings calls and allows excuses such as sales timing isnt much of a CEO.
Why IBM Failed To Impress [View article]
Now I think the answer is clear that IBM is no longer the company it has been for the past many years which I call the Gerstner/Palmisano era. Long term investors will remember IBM was poorly run before Gerstner took over and sold the PC business.
What bothered me last year was that the Board of Directors had a policy to get a new CEO when a CEO turns 60 or some such irrelevant policy. So an excellent performing CEO was pushed out! One I might add that performed throughout the Great Recession without fail. Excellent CEOs are hard to find and should not be taken for granted!
I blame the Board of Directors not only pushing out Palmisano but for handing the Chairman of the Board role to the new unproven CEO as well.
What happened on Friday wasnt just a miss. I find it quite different when a company loses 5% of its revenue. The excuses given by management of currency translation, big orders just missing the deadline and the economy are just excuses. In the call an analyst asked if they were going to raise next quarter estimates since they had all that revenue booked just after the deadline and they said No.
I dont think IBM can be counted on to perform anymore. Instead of a Gerstner/Palmisano leadership IBM looks to have transitioned to a HPQ style leadership.
PS In another great move the new CEO was afraid to show up to explain the quarter.
International Business Machines' Management Discusses Q1 2013 Results - Earnings Call Transcript [View article]
They need to get rid of their CEO. She isnt cut out to deliver performance. The tech industry is not kind to those who fall behind.
The huge decline in revenue is inexcusable. They can save the excuses for someone who wants to hear them. A 4% decline in revenue is beyond a small miss in a tough environment.
GE: Is It Time To Hold On Or Buy More? [View article]
GE has great 5 year potential due to the businesses and cash as outlined in the article.
The cash listed in the article seems higher than sources I reference but by all accounts GE has lots of cash and has to figure out what to do with all of it.
My belief is that an investment in GE now would have a return of 13.5% in one year. I come to that with an expected 1 year price of $26 and an increased dividend.
That 13.5% return is a conservative return expectation. One could argue persuasively that GE deserves a forward PE greater than 12.3
Time To Fill Up On Coca-Cola? Highlights And Earnings Expectations [View article]
KO is an excellent holding for a retirement portfolio. My assessment is that it is now fairly valued by historical standards.
The days of finding KO at a 15 PE and a 3%+ dividend are hard to find historically. Now KO is trading at 20 PE and 2.5%+ dividend. I have seen it trade at an 88 PE and 1%+ dividend.
The great management and high cash flow should keep KO doing well for years to come. That said comparing return potential to times when KO products spread around the country and then around the world are probably misguided.
Meg Whitman Owns HP Now [View article]
Lethargy
After several years of methodical decline and phenomenal Board of Director incompetence they were finally able to muster up a change.
I still have to question HPQ because something other than performance dictates the selection and retention of leaders.
My guess is Meg will continue to blame others. HPQ will be broken up and sold off in the end because of inbred leaders at the Board level.
General Electric And Caterpillar Shares Could Be Indicating That A Market Correction Is Coming [View article]
My suspicion is that GE will outperform this quarter. With huge cash flow to valuation they will buy back shares if needed to beat the earnings target.
GE is actually undervalued and with a 3.3% dividend yield it offers great investor potential.
Bank Of America Is Going To $25 [View article]
A few extraneous thoughts
BAC stated last year come March with government release they were prepared to address the dividend... What happened?
BAC is at a point where they would like to clean the deck of litigation and move forward. We may get to see the full extent of Countrywide assets.
Great article! I am bullish on BAC but one has to acknowledge there could be some bumps in the road.
It Is Not Can Intel Dominate Tablets, But When [View article]